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12/5/2014 10:35AM

Unemployment Holds Steady, Wages Make Gains

U.S. employers continued a stretch of robust payroll gains and kept the economy on track to record its strongest year of job creation in 15 years. David Lebovitz of J.P. Morgan Funds joins MoneyBeat. Photo: Getty.

This transcript has been automatically generated and may not be 100% accurate.

... the November jobs report this morning ... numbers came in three hundred and three and twenty one thousand much more any body was expecting some people are starting to wonder what does that mean for the Federal Reserve ... will have to hike rates sooner than the market has been expecting David Leibovitz ... is east of the market analyst at JPMorgan Asset Management ... joins us today for his take on the report David ... was three twenty one right yet so as to the ... nineteen seventy numbers exactly a ... lot to just give me your impression of the report first off what you may still surprised were you buy that how or so I was surprised by the top line number aam was a surprise but no change in the unemployment rate I think ... the key takeaway from this report is for seeing very strong ... in your old job gains and were kind of seemed lackluster growth ... in the labor force to me that means that wage rises around the corner so I think that your point the risk is that the Fed does something sooner but a lot people are expecting lower top the week is for a second thought it was not hourly was about nine ten from a month ago two point one from a year ago ... that that numbers been creeping up by it not been a strong number no it hasn't been Saranya in one thing that I think it's important for investors to keep in mind is that the relationship between witchcraft and the unemployment rate ... is not linear so the we try to get ... going from seven percent to six percent is completely different in the witchcraft of an experience going from six percent to five in a half percent I think were right at the cost of seeing some meaningful gains in wages in other words ... it's not one to one relationship absolutely these have to move more as you know when we come down that's my days here is that as we continue to see slack in the labor market a road ... eventually people will demand higher wages as employers will have to follow through and that meant to be the ... next year I think the winning play ... that's right it is the beginning of next year's affair Asda and that's why I think the risk is that the Fed raises rates sooner than we expected one of the things that people sometimes forget is that it takes about six months for monetary policy the pass through and hit the real economy so the Fed raising rates for in March for example ... really means that impact will be felt ... until September so I think the Fed needs their side of caution and probably act sooner than the market is expecting ... the I think in a few Fed speakers themselves and come out and come pointed towards me your ... markets thinking me you're really ... say it does come earlier say ... you know we a couple more good jobs report ... the numbers look good ... they do something in the spring ... yet the market lap expecting that we'll get the typical knee jerk reaction ... but how will it take to market to really kind of store that reality yet I think that the market becomes more comfortable with the prospects of a Fed rate hike every single bet that if we saw them do something in the spring I think it would probably be in March rather than April simply because there's a press conference following the March meeting didn't want to be able to explain themselves ... feel the combination of that reassurance from Yellen ... coupled with just a little that I'm one of the week two weeks maybe I it's that time horizon on it but I think the market is becoming increasingly comfortable with the prospect of higher rates to by the time we finally gets a higher rates hopefully the the knee-jerk reaction that you alluded to this relatively short lived I assume that ... assume that the economic numbers go the way to dangle incentives to rent We've pickled growth goes up a little bit ... GDP still growing job for a Fed starts to raise rates ... they're not going to move very fast now and I think that that site ... I think that having an expectation for twenty five basis points every single meeting yet makes no sense at all I think the Fed is like an even slower might be will be slower in my opinion of the thing that the Fed is saying all on ... is that ... it's can it be data dependent they are going to raise rates when they think the economy can stand on its own two feet considerable time I ignore that part of this even at this point does know what it doesn't mean anything I think that they're going to react to where the economy is and that's how they're going to determine how to raise rates the race in March the economy doesn't like it ... they don't have to resume in April they're not found ... anything like the considerable time at the language that has been using ... can it be a stay maybe you people reading it is six months to May vilest Newmarket leave it there thanks I mean really it's the best rap